The Luxembourg government has strongly rebutted recent articles published in the international press concerning alleged shortcomings in the Grand Duchy’s anti-money laundering arrangements.
The principality insisted is fully in line and compliant with all European Union and international regulations and transparency standards and that it applies, without exception, the full arsenal of EU and international measures to exchange information in tax matters and combat tax abuse and tax avoidance.
It was replying to a story that Luxembourg’s investment fund industry is a financial “black box” that helps people launder illicit money and avoid tax, according to an investigation published on Monday.
The OpenLux investigation by journalists from a group of media organisations, including Le Monde, Le Soir, the Miami Herald and Sueddeutsche Zeitung, sifted through four million documents and records on 260,000 companies linked to Luxembourg’s 4.5 trillion euro ($5.4 trillion) investment funds sector between 1955 and 2020.
Under Luxembourg law, investment funds must publish the names of “beneficial” or end investors – the real owner of shares – in a register to help authorities crack down on tax evasion and money laundering.
The government also maintained that Luxembourg provides no favourable tax regime for multinational firms, nor digital companies, which have to abide by the same rules and legislation as any other company in the Grand Duchy.
The authorities added that Luxembourg is a stable, triple-A rated country with an open, diversified economy focussed on high-added value services and industry, including financial services, automotive industry, information technologies, biotech and cleantech, as well as satellite and space technologies.
Many industrial groups have production facilities as well as research and development (R&D) and innovation centres in Luxembourg. The official statement also recalled that Luxembourg is home to one of Europe’s main international financial centres, with multinational firms from across the globe leveraging the financial sector expertise of the country to centralise their cross-border financial activities.
The investigation said that over 80% of private investment funds examined did not declare who their end investors were, said the investigation, which also involved Transparency International and the Anti-Corruption Data Collective.
“Taken together, a significant number of Luxembourg-based funds appear to have failed to identify their owners as required by law,” the investigation said. “The industry, with the trillions of euros in assets under its management, continues to operate as a black box.”
